Correlation Between Sirius XM and Sinclair Broadcast

Can any of the company-specific risk be diversified away by investing in both Sirius XM and Sinclair Broadcast at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sirius XM and Sinclair Broadcast into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sirius XM Holding and Sinclair Broadcast Group, you can compare the effects of market volatilities on Sirius XM and Sinclair Broadcast and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sirius XM with a short position of Sinclair Broadcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sirius XM and Sinclair Broadcast.

Diversification Opportunities for Sirius XM and Sinclair Broadcast

-0.13

Correlation Coefficient

Sirius XM  Sinclair Broadcast

Good diversification

The 3 months correlation between Sirius and Sinclair is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sirius XM Holding and Sinclair Broadcast Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinclair Broadcast and Sirius XM is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sirius XM Holding are associated (or correlated) with Sinclair Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinclair Broadcast has no effect on the direction of Sirius XM i.e., Sirius XM and Sinclair Broadcast go up and down completely randomly.

Pair Corralation between Sirius XM and Sinclair Broadcast

Given the investment horizon of 90 days Sirius XM Holding is expected to under-perform the Sinclair Broadcast. In addition to that, Sirius XM is 1.28 times more volatile than Sinclair Broadcast Group. It trades about -0.05 of its total potential returns per unit of risk. Sinclair Broadcast Group is currently generating about 0.21 per unit of volatility. If you would invest  1,357  in Sinclair Broadcast Group on September 2, 2024 and sell it today you would earn a total of  475.00  from holding Sinclair Broadcast Group or generate 35.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sirius XM Holding  vs.  Sinclair Broadcast Group

Sirius XM Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sirius XM Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Sinclair Broadcast

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sinclair Broadcast Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Sinclair Broadcast demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sirius XM and Sinclair Broadcast

The main advantage of trading using opposite Sirius XM and Sinclair Broadcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sirius XM position performs unexpectedly, Sinclair Broadcast can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sinclair Broadcast will offset losses from the drop in Sinclair Broadcast's long position.

The idea behind Sirius XM Holding and Sinclair Broadcast Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.